How Long Before The Fed Tries To Manipulate Long-Term Rates Lower?

The Fed pledged to hold interest rates low for a very long time. What about the long end of the curve?

US Treasury Yields 1 To 30 Years Chart US Treasury Yields 1 To 30 Years Chart

YIELDS REVEAL A MINI-REVOLT ON THE LONG END

• 3-month Yield: 0.04%
• 1-year Yield: 0.06%
• 2-year Yield: 0.11%
• 3-year Yield: 0.20%
• 5-year Yield: 0.50%
• 10-year Yield: 1.20%
• 30-year
  Yield: 2.01%

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Interest Rates In Developed World Interest Rates In Developed World

US 30-Yr Treasury Yield US 30-Yr Treasury Yield

YIELD CURVE DRAMATICALLY STEEPENS
Yield Spreads 2-10 And 2-30 Yrs Chart Yield Spreads 2-10 And 2-30 Yrs Chart

NOTES

1. In July of 2018 the spread between the spreads was only 12 basis points with the 2-30 spread at 38 basis points and the 2-10 spread at 26 basis points.
2. The 2-30 spread at 1.83 is higher than any time since February 10, 2017.
3. The 2-10 spread at 1.07 is higher than any time since April 7, 2017.

FED LOSING CONTROL OF LONG END

1. On Feb. 8, the Fed noted Monetary Policy Will Stay Accommodative For a Very Long Time. I commented "Like Forever".
2. On Feb. 10, in a speech on the labor market Powell said the True Unemployment Rate is Actually 10%

In Powell's speech, he reiterated the message rates would stay low.

But spreads have widened dramatically which begs the question:

How long before the Fed openly intervenes to push rates lower on the long end of the curve?

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